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Consortia Programmes: Challenge, Excitement and Innovation In Action

Author: Gay Haskins, Director, Executive Education, London Business School
First published: 1997

Companies mentioned: Ford; Smith Industries; BAe; Hewlett Packard; Sony; Electrolux; Rank Xerox; Daimler Benz; Continental AG; United Distillers; Marks & Spencer; British Airways; BT; Lloyds Bank; Vauxhall Motors; Metra Corporation; Volvo; Norsk Hydro; Midland Bank; Alcatel; Lufthansa; Shell; Tetra Laval; LG; SKF; Standard Chartered Bank.

If you were to ask me which approaches to executive education are the most challenging, exciting and innovative right now, I would probably answer, 'Consortia programmes'. For they embody the two key trends that recent research into executive education has identified1: company-specificity and partnerships. And they are certainly in demand! When, for instance, we asked a range of our key LBS UK clients what topics they would like to discuss over an informal lunch, consortia programmes topped the list.

In this article, I shall first briefly outline the whys and wherefores of consortia programmes. I shall then describe five consortia that are presently offered in Europe. Finally, I shall try to draw some conclusions as to what is needed to make consortia approaches reach their potential as outstanding approaches to executive development.

What are consortia programmes?

The term 'consortia programmes' in executive education is used generally to describe programmes in which a group of companies - typically five or six - have got together (either of their own accord or through a push by a business school or consultancy) to provide jointly an education development programme for their managers.

Most frequently, the companies identify between four or six participants who will take part in a programme with shared learning objectives and offered through a jointly identified outside provider.

Why form consortia?

In Arnoud de Meyer's article (Chapter 2), a warning is given about the need for balance between open enrolment programmes and tailored activities. 'Open enrolment programmes', he writes, 'have a lot of volume because they expose participants to other organizations and are often a good benchmark to see where the company stands in terms of professionalization.'

As we shall see from the consortia descriptions below, consortia can offer an excellent - perhaps unparalleled - opportunity to benchmark, particularly between companies that are not direct competitors. They also meet the need identified in Peter Lorange's article (Chapter 4) '[to] force executives to look more closely at the issues, to perceive them from several angles and in a more realistic way'. And at the same time, they allow for each company team to look at the particular relevance of the learning to their own organizational and own individual situation.

The following four consortia provide opportunities at different organizational levels from relatively young, high potential managers who need a general management perspective, to seasoned senior managers whose challenge is to operate a successful trans-national corporation.

The Henley Intercompany MBA

In the words of Robbie Friendship, Business Development Manager at Henley Management College, 'Interest in working with other organizations in a consortia is becoming increasingly attractive to many major companies.' To this end, Henley has developed two consortia MBA programmes.

The Henley Intercompany MBA Programme is ideally targeted at those high potential managers who need to develop a broader perspective of management and how other organizations operate. Groups of companies sponsor four to six people at a time who work together through a three-year MBA using open learning materials supported by regular workshops.

A key feature is that the workshops are hosted by the different companies with senior management involvement and site visits as an integral part of the learning. This gives the opportunity for benchmarking and best practice as well as creating a strong business network for senior managers of the future. The programme operates across Europe with 43 companies now nominating on a regular basis - Ford, Smiths Industries, BAe, Hewlett Packard and Sony, to name but a few. The same model will now be offered in the US to meet the needs of those international companies who need to have flexibility of movement for their managers around the world. It is therefore possible for a manager to start the programme with a group in Europe, be moved to the US and continue and then finish the MBA in Asia/Pacific.

The International Consortium MBA

Robbie Friendship feels that this is one of the most innovative programmes offered within the Henley portfolio. It is aimed at more senior managers than the Intercompany MBA who are already in, or will be taking on, an international role for the company.

Each group of companies has the programme tailored to their shared objectives, time frames and chosen locations for residential modules; therefore no two consortia will be exactly the same.

The companies in the first group are Electrolux, Rank Xerox, Daimler Benz, Continental AG and United Distillers. They are brought into the planning process through regular development, progress and review meetings. Locations can be anywhere in the world - for the above group, these have been Italy, Germany and the UK - and the final residential will be three weeks in China. The 24 participants are from 18 different countries around the world.

The Consortium for Executive Development

Initiated by Marks & Spencer, this consortium consists of British Airways, BT, Lloyds Bank, Marks & Spencer and Vauxhall Motors. Its programme is for senior middle managers with high operational responsibility and actively involved in general management. The aim is to broaden strategic perspectives through a learning environment in which individuals can benchmark with their peers and make cross-organizational comparisons in a range of business settings. As well, through a modular format of five three-day sessions over a nine-month period, participants have the opportunity to build up a broadly-based cross-organizational network that complements their in-company peer group.

The programme is designed by Professor Paul Geroski of London Business School together with representatives of the participating companies. Now in its fourth iteration the themes covered by the five modules vary according to corporate and participant preferences. Currently they include the following:

Module 1: Organizational Strategy and Structure
Module 2: Managing People to Create Customer Focus
Module 3: Managing Partnerships
Module 4: Managing Information-oriented Business
Module 5: Managing Leadership

This programme has been designed to facilitate as much benchmarking between participants as possible, and this means that most of the 'teaching' is done by the participants themselves. The four settings in which this occurs are:

• in reading and reflection before and after each module;
• in plenary discussions before and after the site visits;
• on the site visits, in the business context in which problems arise and decision are made; and
• in the written reports of the company groups which focus particularly on the lessons learned from the other companies which might be transferable.

This consortium is perhaps the 'simplest' in format and design of the four that we are describing. It works well and could, we believe, be 'exportable' to other countries beyond the UK with, of course, some adaptation to national preferences.

Key to the Consortium's success are, we believe: the fact that it is business driven with a high level of involvement from the participating companies; the facilitation (as opposed to 'lecturing at') of the Programme Director who works with the participants towards a shared learning experience; and, as one participant noted on his evaluation of the most recent programme, 'The highlights of all modules were the company visits, which invariably provided stimulating inputs and discussion.' This is clear evidence of the corporate commitment which has led to excellently organized company visits with rare benchmarking opportunities.

The STEP Consortium

Probably the longest-running consortium programme in the world, the Strategic Transnational Executive Programme (STEP) began in 1983 and has generally taken place in Switzerland. It was conceived by the Chairmen of Wartsila (now Metra Corporation) and Volvo, together with top executives of Norsk Hydro, Midland Bank and Hewlett Packard, with the aim of finding an alternative to traditional business school programmes. The perceived need was for a development initiative that enabled both benchmarking with other companies and practical, participative, company-focused learning. Today, most senior managers of Wartsila/Metra have participated in STEP.

Organized as a joint venture, STEP has five to six non-competing members at anyone time. Each corporation joining the STEP programme provides a senior member to represent the corporation on the STEP Board, and a minimum two-year commitment to membership is required and an entrance fee paid on joining. Since its inception, eleven major companies have participated in STEP: ABB, Alcatel, Hewlett Packard, Lufthansa, Metra Corporation, Midland Bank, Norsk-Hydro, Renault, Shell, Tetra Laval and Volvo.

As with the Consortium for Executive Development, the STEP Board play a critical role in monitoring the Programme's development, objective, contents, budgeting and participants. As well, it is they who have the right to select (or replace) STEP's Programme Director. The STEP programme is for senior managers who hold positions such as business area manager, country manager, company president or senior staff positions. Fifty per cent of the participants should have global business responsibilities and 50 per cent local business responsibilities. Each company sends five to six participants.

The nine-month long, three-module programme focuses on the implementation of strategic change while enhancing the capability to manage across borders and to be cross-culturally aware. The objectives are fourfold:

• to broaden the understanding of transnational management;
• to address effectively issues that are critical to senior executives in large global corporations;
• to stimulate creativity and new attitudes in global management;
• to enhance leadership ability, the capacity to manage complexity and to implement change.

Like the other consortia described in this article, STEP demands a high level of participant involvement, openness and peer group learning. A key differentiating feature is the 'change projects'. These provide an opportunity for the corporation and the STEP team of participants to make a breakthrough change in an area related to a critical strategic issue for their corporation. They serve as a vehicle to go from vision to action, to develop cross-border teamwork and efficiency and to share experiences with other STEP participants. The participants select individual (or team) change projects within the framework of the key strategic issue defined by corporate management.

Over its 13 years, the focus of STEP has shifted. Olle Bovin, STEP's current Programme Director, participated in its development when he was Director of Training and Development for Hewlett Packard Europe. He recalls, 'The programme started with a basic strategic planning approach. Its projects were linked to major strategic changes designed by the CEO. After about five years, however, the focus of the projects shifted to an implementation orientation. And now, the focus is on breakthrough changes and on leading change at the top. In addition, in the early days of STEP the programme was longer with more modules. Today it is shorter and more focused.'

The Global Business Consortium

The newest of the five consortia described here is the Global Business Consortium. Like STEP, this international consortium is for senior managers working as country or regional managers or in other senior positions requiring transnational capabilities.

Directed and facilitated by Dr Lynda Gratton and Professor Sumantra Ghoshal, the Global Business Consortium is designed to accelerate rapidly managers' ability to create and sustain global competitive advantage. It brings together the world-class companies ABB, BT, LG, Lufthansa, SKF and Standard Chartered Bank in a consortium designed
to grow the next generation of global business leaders capable of taking the business forward to the next phase of development. The emphasis is on participants learning from each other and engaging in strategic benchmarking and planning with other world-class companies. This company focused approach brings energy to solving business issues while broadening global perspectives. Five senior, international participants are nominated for the three-week global programme and work with other participants in modules which span Asia Pacific, India and Europe as shown in Table 3.1.

The accent in the programme is on linking sound academic research with real life experience and learning. The key elements are:

• Creating Global Strategy: participants work together and with Professor Sumantra Ghoshal to develop an in-depth understanding of global strategy. The emphasis is on creating horizontal synergy in the transnational company, building local competence in a global network and sustaining competitive advantage.
• The Regional Perspective: discussions with leading politicians, academics and senior managers in Asia Pacific, India and Europe bring a real understanding of the relationship between global strategy and regional characteristics.
• The Country Platforms: the regional perspective becomes focused in the Country Platforms when participants have an opportunity to listen to and debate with Consortium country managers' experience of operating in that country.

These are further enhanced by specially commissioned case studies on each participating company; 'company perception exercises' in which participating companies are asked to build a picture of a paired consortium partner; cross-company team work; competitive advantage task forces in which each company team works on the implications of the learning for themselves; and last but not least a CEO forum in which findings and recommendations are made to the CEOs of each participating company.

Something to be proud about? So far we think so! And so, it seems, do our participants who are now demanding further modules in the USA, Korea, Indonesia and beyond.

Consortia Programmes: making them work

These programmes excite me. They also seem to excite the companies involved, the faculty of consultants involved and the participants.

But before the deluge of interest, let us look at some of the lessons learned thus far and the requisites for making consortia work.

1. Company commitment / company-driven consortia

Companies should not expect to come to a consultant or business school and say, 'Form a consortium for us; we are eager to explore this approach.' No! It appears to us that the best consortia are company driven. What, for instance, is likely to elicit the best response? An invitation to join from ABB Vice President Robert Feller, Chairman of the STEP's Consortiums' Board and active member of the Board of the LBS Global Consortium, or an invitation from the business school or consultancy running it? My own bets are on the company-driven approach! As well, it allows the participating companies to identify and/or select the membership of the consortium. Says Lynda Gratton, Director of the LBS Global Consortium, 'Consortia work best when the
companies select their fellow members themselves. This creates ownership and commitment.'

In addition, the more corporate commitment there is, the more programme relevance there will be. As we have seen, it is the company benchmarking visits that form the backbone of the LBS Consortium for Executive Development. In the STEP Programme, the company-focused 'change projects' are a critical success element. And without the company focus of each Global Consortium Module (SCB in Hong Kong, Lufthansa and SKF in Delhi and Bangalore, and ABB and BT in Mannheim and London), that consortium would lack a key value-added element.

Such involvement does, however, demand a significant shift in traditional corporate approaches to schools and consultancies. The companies are no longer merely buying our products. Rather, they are jointly engaged in the design and delivery.

A further reason for the companies to be 'in the driving seat', is that they can then form the Consortium Board, oversee financial planning, drive change and demand performance from their supplier. For, in both the LBS and STEP consortia, the companies are at liberty to dismiss their suppliers if they under-perform. It is the companies who own the consortia.

2. Faculty as facilitators

The success of the consortia approaches described above depends on programme directors, faculty and consultants who can really facilitate learning. This means that they must be able to draw out the experiences and learning from the company visits, external guest speakers and the cultural environment in which the various modules take place. This is no easy task. It requires outstanding listening ability; an ability to understand and draw from the participants' own experience and backgrounds; and a willingness to 'talk with' rather than 'talk at'. Such competencies are relatively rare and to be nurtured. We are all fortunate to have identified those faculty and consultants who drive the consortia described above. In my experience, however, they are relatively few. Selection of the right people as consortia suppliers is absolutely critical to their success.

3. First-rate administration

Never underestimate the administrative excellence required to make complex ventures like these consortia work. In most company-specific programmes, you are partnering with one company. In consortia, there are five or six, all equally demanding!

When six of the participants and the Director are bumped off the flight from Delhi to Bangalore the Programme Administrator/Manager must seem to know what to do! As an SKF participant said of the LBS Global Consortium Manager, Nicky Gamble, 'She allowed me to concentrate on the programme.' And that is exactly what is needed.

4. Design time - and involvement

When I estimated the design time required for our Global Consortium, both the companies involved and our Programme Director, Lynda Gratton, were surprised! But for once, I was right! Consortia require far more design time than traditional programmes.

They require that the faculty leaders should really know the companies, should have met with at least a cross-section of participants and should have met several times before the programme is launched with the Consortia Board in order to ensure full input and sign-off on the programme design. And, in the case of Europe-wide or global consortia, the time required is even more than for national initiatives.

Nor does the development work cease after the initial programme. 'It is a continuous development task,' says Olle Bovin. And, in addition, the faculty must be constantly updated on the strategy performance and operations of the companies involved.' Consortia programmes should not, therefore, be viewed as a less expensive alternative to open executive programmes. Generally they are equally – if not more - costly to launch and run!

5 Transfer of learning

At their best - as we have seen from these few examples - consortia programmes offer a real opportunity for learning transfer. They enable both the acquisition of new knowledge and the utilization of this learning. The benchmarking focus facilitates opportunities to see and share other approaches and to transfer them back to individual company situations if appropriate.

Success in global business requires managers with an in-depth understanding of different cultures, business practices and market opportunities. As STEP Consortium Director, Olle Bovin observes, 'Real success comes only when demonstrating the capability to utilize the knowledge and experience that exists in different parts of the world in attaining business goals. Consortium programmes can provide an excellent opportunity to develop this capability.'

This is an era of strategic alliances; companies form them to develop new technologies, to exploit production opportunities or to develop new markets. The rise of consortia programmes is a further manifestation of this type of outward-directed strategic thinking designed to develop skilled management resources. Like all strategic alliances, consortia programmes are not easy to manage but, when successful, are an outstanding management development approach.

Further information

For further information on these consortia, please call:

International Consortium MBA: Michael Pitfield or Robbie Friendship at Henley Management College, Greenlands, Henley-on-Thames, Oxfordshire, UK.
Tel: +44 1491571454; Fax: +44 1491571454

STEP Consortium: Olle Bovin at International Leadership, 6 Chemin Chatebise, CH – 1291 Commugny, Switzerland. Tel: +41 22 776 0255; Fax: +41227760296

Consortium for Executive Development/Global Business Consortium: Gay Haskins at London Business School, Sussex Place, Regent's Park, London, NW1 4SA,UK

References

1. Research by European Foundation for Management Development (efmd), 1994/5 available from efmd, Rue Washington, 1040 Brussels, Belgium. Fax: +32 2 646 07 68; attention Martine Plompen.